NEW DELHI: Chief Economic Advisor V Anantha Nageswaran stated on March 3, 2025, at the IGPC-IIMA annual gold and gold markets conference, "Gold will remain relevant not only as a store of value, as an ornament for cultural and religious purposes, but also as an important portfolio diversification mechanism until such time the world is able to arrive at an international monetary system from the current international monetary non-system." This assertion highlights gold's role as a reliable investment choice amid shifting economic conditions.
The advisory came as the value of gold surged by over $200 per ounce, or 8%, over the past three months, bringing the current price to $2,860 per ounce. Such fluctuations are significant, considering gold's historical path; its price has seen a remarkable rise from approximately $250-290 per ounce just over two decades ago, marking an increase of nearly ten times since 2002.
Currently, India boasts gold prices around Rs 85,000 for every 10 grams. The nation's status as a net importer of gold adds another layer of economic significance, underlining the material's importance not just as jewelry but also as a driver of investment decisions.
Nageswaran emphasized, "It is very important to understand the relevance and importance of gold for portfolios, particularly against the backdrop of the likely ascending importance of gold in the coming years." He also pointed out the necessity for India to find productive ways to deploy its gold assets. He asserts, "That is where the policy challenge lies," as the country grapples with balancing gold's traditional status as both value storage and its role rooted deeply in cultural and religious practices.
The discourse surrounding gold appears timely, particularly as the global economy faces persistent fears of inflation, which Nageswaran noted is derived from the consequences of policy discretion initiated back in 1973. He stated, "Given the fear of inflation is still there and the world is witnessing the aftereffects and the consequences of policy discretion commenced in 1973, gold's importance will continue to remain very salient and high." This perspective clearly indicates why investors and policymakers should heed changes to gold's role moving forward.
Looking for ways to innovate within the gold sector, Nageswaran expressed hope for strategies to effectively incorporate gold within India's growing investment framework without diminishing its long-held value as both an asset and symbol. He articulated this during his speech, highlighting the need for advancement within India’s gold market: "Productively deploy the gold assets we have without diluting their role as symbols of value and cultural significance. That is imperative for us."
The broader economic picture plays heavily on individuals' and institutions' thinking about gold’s function. Economic fluctuations, value changes, and inflation fears all shape investor sentiment. Nageswaran's insights encapsulate the increasing sophistication of how gold is perceived and its increasingly strategic role within investment portfolios.
Overall, Nageswaran's remarks align with growing global interest surrounding gold, especially as uncertainty looms over other economic assets. Investors seeking stability and long-term value may find gold continuing to stand out amid tumultuous financial landscapes.
India's investment and trading patterns may evolve as more innovators emerge seeking to tap this commodity's multifaceted relationship within the cultural and economic fabric of the nation. With gold's perennial allure and the innovative approaches potential on the horizon, the future positioning of this asset class appears stronger than ever.